House Democrats Challenge Comcast, NBC on Deal

AP

Published 4:37 PM ET Thu, 25 Feb 2010
The Associated Press

Congressional Democrats challenged executives from Comcast and NBC Universal on Thursday to show that the cable TV operator's plan to take control of the entertainment company won't hurt consumers and rivals.

Comcast | NBC Universal

In back-to-back hearings, members of House and Senate subcommittees expressed concern that the transaction could lead to such competitive harms as higher cable TV rates and fewer video programming choices.

"The issue before us really boils down to the seven C's," said Rep.

Edward Markey, D-Mass., a senior member of the House Commerce subcommittee on communications and technology. "Will this combination of communications colossi curtail competition and cost consumers?"

Comcast , based in Philadelphia, is seeking federal approval to acquire a 51 percent stake in NBC Universal from General Electric . The Justice Department and the Federal Communications Commission are expected to sign off, but likely with conditions. Input from Congress could sway the outcome of those regulatory reviews.

Comcast CEO Brian Roberts told lawmakers that the combination would produce "a more creative and innovative company that will meet consumer demands" and drive more innovation among competitors.

NBC Universal CEO Jeff Zucker added that significant investment made possible by the combination would help NBC Universal compete in a rapidly evolving entertainment business that has become a "media free-for-all."

Comcast, which serves a quarter of all U.S. households that pay for TV, already owns some cable channels, including E! Entertainment and the Golf Channel. The deal would give Comcast control of the NBC and Spanish-language Telemundo broadcast networks, popular cable channels such as CNBC, Bravo and Oxygen and the Universal Pictures movie studio.

Sen. Al Franken, D-Minn., said he is worried about the dangers of allowing the nation's largest cable and broadband provider to take control of NBC Universal's vast media empire.

"When the same company produces the programs and runs the pipes that bring us those programs, we have a reason to be nervous," said Franken, a comedian who spent nearly two decades as a writer and performer for NBC's "Saturday Night Live."

Satellite TV companies and other rivals in the video business have warned that the combined company could drive up prices for — or even withhold — popular channels. And small independent programmers fear that Comcast cable systems could stop carrying channels that compete with its own, or relegate rival channels to premium tiers with fewer subscribers.

Public interest groups have also raised concerns that Comcast would begin charging for its media content online.

Roberts said the proposed transaction doesn't raise significant antitrust concerns because Comcast and NBC operate in highly competitive markets with a "lack of overlap." Several Republicans echoed that point.

"We've heard some of the usual predictions that this is the end of the media world as we know it," said Rep. Joe Barton of Texas, the top Republican on the House Energy and Commerce Committee. "Put me down as skeptical on that."

Comcast has already made some pledges meant to ease worries about the deal. Among other things, the company has vowed not to move NBC's free, over-the-air network to cable and pledged to ensure that rival providers can get access to Comcast-owned programming at fair rates.

But Herb Kohl, D-Wis., chairman of the Senate Judiciary subcommittee that handles competition policy and consumer rights, said those pledges are merely a starting point and called on regulators to attach strong conditions on any merger approval.